Tomato Paste Production Business
Plan
Introduction
This Business Plan describes the investment, cost and benefits for setting up a premium quality
Tomato paste factory in Nigeria. The plant will commence production of Tomato paste filled and
packed in sterilized pouch of 70 grams.
The Plant whose installed Raw material input capacity is 500kg/h of fresh Tomatoes will produce
double concentrated tomato paste at 28% Brix using Cold break method.
The Industry Analysis and competitiveness
Tomato is an important vegetable (technically fruit) rich in the deposit of vitamins, mineral, and
iron. It is a good source of lycopene and forms an everyday component of meals in Nigerian
households: served in salad, eaten fresh and the main item in stew preparation.
With an estimated annual output of 2.4 million tons, Nigeria is the largest producer of tomatoes in
sub Saharan Africa, and ranked 13th in the world. Due to its short lifespan and seasonal dual trait –
periods of plentiful and subsequent shrink period – storage has become a big challenge in the value
chain of this rich vegetable/fruit. Although several unconventional storage mechanisms have been
deployed in the past, they all proved inadequate and unreliable.
Nigeria currently produces about 1.7 million tons of tomato paste a year but its actual demand is
about 3 million tons, of which the short fall is met via imports. The country has the potential to
produce about $100 million US worth of tomato paste annually. The demand gap has always been
met through imports of about of tomato concentrate and paste valued at $1 billion annually
justifications for entry into the business
Nigeria’s being the largest Cultivator of Tomatoes in Africa is a potential import markets for
processed Tomatoes in the African Continent.
Tomato paste Imports of $1.5 Billion Dollars yearly fuels local manufacturing in Nigeria
Imports of fresh Tomato ban in Nigeria are a boost for the investor.
Local Manufacturers returns margin on investment of between 17% and 35%
High Nigerian Urban development which is growing at 8% annually is also a contributing factor
for the demand of Processed Packed tomato paste.
Tomatoes are cultivated all year round making it available for production
High demand and repeat-sales tendency because of large and increasing population
The country has a significant demand for the product but almost half of the tomato pastes
found in its markets have been imported from China and Italy.
Competitive Analysis
The emerging battle for supremacy among brands has pitched foreign brands like Gino, St Rita,
Vitalis, to mention a few, against local brands such as Tasty Tom, De Rica, and Festin, produced by
Olam International, and Ric Giko and Nagiko tomatoes produced by Erisco Foods Limited.
The intense competition has narrowed the lead to just very few brands while other indigenous
brands are slowly expanding their brands in the market. However, in the last few years, Gino has
emerged the new king, having wrestled leadership from De Rica which had dominated the market
like a colossus for a long time.
AYC Street Metrics Brands share of the Market 2019
Brand Name Share of the market Origin of Brand
Gino 51% Imported
De Rica 37% Locally Produced
Taste Tom 6% Locally Produced
Ric Giko 3% Locally Produced
Vitalis 1% Imported
St Rita 1% Imported
Sonia 0.4% Locally Produced
Value place route to the Market
The Plant will build relationships with Hotels, restaurants, Supermarkets and Stores to promote
the buy-in of the brand and offer distributors as well as retailers the opportunity to make profits in
a category that they are not used to earning. The brand will support environmental and health
concerns within the Nigerian society to stay on the mind of consumers and build a stronger
customer loyalty and retention drive in the light of impending competition.
Proposed Production Plan
The plant will produce package Tomato paste in pouch. Raw material input capacity 500kg/h input
fresh fruits. The plant will commence at 60% of output capacity the products will be packed in
70grams size pack– 50 packs per carton. Production however would commence at 70% capacity
utilisation of installed capacity.
Equipment Requirement
Description
1 Receiving and Washing machine
2 Fruits pitting coring and Crushing machine with plat
3 Sandwich pot boiler
4 Reverse osmosis water treatment system
high speed 5 heads linear filling machine of liquid, paste
5
and sauces
6 Tape sealing machine
7 Fuel boiler
8 Air Compressor
Full line of pipe, electric cable, valve group and other
9
auxiliary parts
1
Conveying and packing platform and tables
0
1
Food Test Equipment
1
Other machinery
1
Diesel 70KVA Generator
2
1
Marketing/ Delivery mini vans
3
1
Safety Equipment and tools
4
1 General tools
5
FINANCE
The entire Production plant for this model would cost about 35 Million Naira excluding generator
plant, factory Building and Vehicle for distribution. Working capital requirement are expected to be
budgeted for at least 3 months of production including special tomato farmers funding
arrangement so as to be assured of constant raw materials supply all year round.
PROFITABILITY
The first year profit before tax is arrived at about N16.5 Million Naira. Payback period is typically
within 3 years of operation where it is managed efficiently. This venture qualifies for funding
under the various federal funding windows including CBN Agriculture Loan and The Bank of
Industry.
